Quick Answer: Is Interest Income Taxable In Kenya?

Is interest considered earned income?

Examples of income that are not earned income: Interest and dividends.

Pensions or annuities.

Social security..

Is withholding tax on interest Final tax in Kenya?

WHT is levied at varying rates (3% to 30%) on a range of payments to residents and non-residents. Resident WHT is either a final tax or creditable against CIT. Non-resident WHT is a final tax.

What is the VAT rate in Kenya?

16%Value Added Tax (VAT) is a consumer tax charged on the supply of taxable goods or services made in Kenya and on the importation of taxable goods or services into Kenya. The rate for VAT is either 0% or 16%.

How do you calculate tax payable on total income?

* Subtract the Deductions under Chapter VI-A from your Gross Total Income. The result will be your total taxable income. After calculating your total taxable income, apply the tax rates relevant for the financial year for which the income has been calculated to compute your tax liability.

How do you check if you have KRA penalties?

How to check KRA outstanding penaltyVisit the iTax website.Enter your Kenya Revenue Authority PIN into the PIN box and click continue.Enter your PIN.Key in the arithmetic sum of the security stamp and log in.Click on the menu labeled Debts and Enforcement.Then click on Apply for waiver for penalties and interests.More items…•

Does interest count as income?

Most interest income is taxable as ordinary income on your federal tax return, and is therefore subject to ordinary income tax rates. There are a few exceptions, however. Generally speaking, most interest is considered taxable at the time you receive it or can withdraw it.

Who is supposed to pay tax in Kenya?

Individual Income Tax is charged for each year of income on all the income of a person, whether resident or non-resident, which accrued in or was derived from Kenya. Personal Relief of Kshs. 28,800 per annum (Kshs. 2,400 per month).

How do I report interest income?

Taxable interest is taxed just like ordinary income. A payor must file Form 1099-INT with the IRS, and send a copy to the recipient by January 31 each year. Interest income must be documented on Schedule A & B on Form 1040 of the tax return.

Who pays withholding tax in Kenya?

Interest when paid to both resident and non-resident persons is liable to withholding tax at 15% on the gross interest paid, with the exception of interest from housing bonds to resident persons which is subject to withholding tax at the rate of 10% on the gross interest paid.

What is income tax resident in Kenya?

An individual present in Kenya for at least 183 days in the tax year is resident, as is any person who has averaged 122 days in country in the tax year and the previous 2 tax years. Tax Filing status – A married couple living together may elect to file separate returns.

What is the minimum taxable income in Kenya?

Tax brackets in Kenya The minimum taxable income comes from the lowest earners (KES 12,298 and below) who pay a tax rate of 10% while the highest band ( from KES 47,059 and above) give 30%.

How much is personal tax relief in Kenya?

In Kenya the Income Tax Act (cap 470), Section 30 allows for personal relief at the rate determined under the third schedule, which sets rates of relief. Presently personal relief on taxable income is set at 1,162 shillings per month, which accumulates to 13,942 shillings per year.

How do I claim withholding tax in Kenya?

Filing as a Withholder You file the withholding returns via the itax portal. To file, you will need to prepare an excel file of the Gross amount, the amount withheld, and the KRA PINs for the people you have withheld from. After filing, you can generate a payment slip to pay the amount.

What is the taxable income in Kenya?

The Personal Income Tax Rate in Kenya stands at 30 percent.

What is the tax on interest earned?

In most cases, your tax rate on earned interest income is the same rate as the rest of your income. So if your normal tax bracket is 25 percent, you’ll also pay 25 percent of interest in taxes.

What is qualifying interest in Kenya?

The definition of qualifying interest has been amended to make any interest earned by a resident individual that is subject to 15% withholding tax, to be final tax.

Is income earned abroad taxable in Kenya?

Foreign income is income earned outside Kenya which would have been taxable in Kenya under Kenyan tax laws if it had been accrued or derived in Kenya or deemed to have accrued in or derived in Kenya. … However, there are a few exceptions to this rule such that income earned outside Kenya is taxable in Kenya.

Who is exempt from paying tax in Kenya?

Beginning 1st January 2020, any income earned by an individual registered under the ADP, shall be exempt from tax for a period of 3 years provided the qualifying members pay a KShs 10,000 subscription upon registration. This is a Government incentive to bridge the gap between skills and lack of jobs.